you won't be able to sell in the EU market anymore
> Is the EU customs peeps just going to start inspecting every single package from China looking for items from Temu?
They might, why not. It would be unwise to pick a fight like this for any company.
Or maybe getting google and apple to make the app not available in the EU.
> it would cost a ton of money
That's why the EU is imposing a €3 fixed customs duty per item (and later another €2 handling fee) effective July 1 (should have been much sooner in my opinion) for small packages (under €150), in addition to the VAT.